Cabinet Approves Final Amendments to Insolvency Bankruptcy Code

Why in the News ?

The Union Cabinet has approved the final amendments to the Insolvency and Bankruptcy Code (IBC), incorporating recommendations of the Baijayant Panda-led Parliamentary Select Committee. The legislation is expected to be introduced in Parliament, aiming to strengthen India’s corporate insolvency resolution framework.

Key Amendments Approved in the Insolvency and Bankruptcy Code:

• The Union Cabinet has cleared the final amendments to the Insolvency and Bankruptcy Code (IBC), 2016, and a Bill is likely to be introduced in Parliament during the ongoing session.

• The amendments incorporate several recommendations of the Parliamentary Select Committee chaired by Baijayant Panda, which reviewed the earlier draft of the legislation.

• One key provision ensures that resolution professionals managing insolvency cases cannot act as liquidators if the corporate rescue plan fails. This aims to improve transparency and reduce conflicts of interest in insolvency proceedings.

• The amendments also propose a three-month timeline for the National Company Law Appellate Tribunal (NCLAT) to dispose of bankruptcy appeals, helping reduce delays in insolvency resolution.

• Another provision clarifies the “clean slate principle”, stating that once a resolution plan is approved by the tribunal, all claims not included in the plan will stand extinguished, preventing further litigation against the revived company.

Other Major Decisions Taken by the Union Cabinet

• The Cabinet also approved a major expansion of the Jal Jeevan Mission 2.0, increasing the total outlay to ₹8.7 trillion until 2028 to ensure tap water access to every rural household.

• The Central government’s share in the programme has been increased to ₹3.59 trillion, while the remaining cost will be borne by the States.

• Additional infrastructure initiatives were also cleared, including road and rail projects worth about ₹8,300 crore to strengthen connectivity.

• The government approved extending the Delhi–Mumbai Expressway to the upcoming Jewar International Airport in Uttar Pradesh, improving regional transport infrastructure.

• The Cabinet also granted full international airport status to Madurai Airport, which is expected to boost tourism, trade, and regional economic development in southern India.